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Argentina Reaches Paris Club Debt Deal without IMF Intervention; Creditors Come Under Fire Print
Written by Jake Johnston   
Friday, 30 May 2014 14:08

Locked out of international capital markets since its 2001 default, Argentina cleared a major hurdle on Thursday when it reached an agreement with the Paris Club, a grouping of 19 major economies, to resume debt payments and clear outstanding arrears. The Paris Club issued a statement, noting that:

The scheme offers a framework for a sustainable and definitive solution to the question of arrears due by the Argentine Republic to Paris Club creditors, covering a total stock of arrears of USD 9.7 billion, as of 30 April 2014. It provides a flexible structure for clearance of arrears within five years including a minimum of USD 1150 million to be paid by May 2015, the following payment being due in May 2016.

Economy Minister Axel Kicillof, who led the negotiations for the Government of Argentina, told a local radio station that, “Argentina is continuing its path of regularizing and paying off the debt that 40 years of neoliberalism left us,” Reuters reported.

Long thought to be a lynchpin of any possible deal, Argentina secured the settlement without the involvement of the IMF. President Fernández told the press, “It is the first time that a country negotiates without the intervention of the International Monetary Fund (FMI), and without ceding our independence.”

Argentina’s 2001 default followed years of following IMF prescriptions, which only exacerbated the crisis. Argentina broke off relations with the IMF in early 2006, paying back all of its outstanding debt to the Fund in one move. In a statement following the current deal, Eric LeCompte, Executive Director of Jubilee USA, praised the lack of IMF involvement:

“Argentina negotiated an agreement that keeps the IMF out of Argentina... IMF austerity programs have wreaked havoc in both poor and wealthy countries.”

Business News Americas reported that the creditors agreed to exclude the IMF “in return for a larger down payment by Argentina.”

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Ahead of House Vote, Members of Congress Warn Sanctions Could Undermine Dialogue in Venezuela Print
Written by Dan Beeton   
Wednesday, 28 May 2014 17:09

Ahead of a House vote to pass sanctions against Venezuelan officials today, 14 members of Congress sent a letter [PDF] to Secretary Kerry yesterday urging against sanctions, warning that they could undermine the dialogue process between the Venezuelan government and the opposition. Instead, the members - who include John Conyers (D-MI) and Hank Johnson (D-GA) - suggested that the U.S. should exchange ambassadors with Venezuela. The sanctions bill passed the House this afternoon with the support of a number of Venezuelan ex-pats in the U.S. who are mostly “from the middle class and upper middle class,” and is championed by anti-Cuba hawks in the House such as Ileana Ros-Lehtinen (R-FL), and Marco Rubio (R-FL) and Robert Menendez (D-NJ) in the Senate.

The letter also notes - unlike statements by sanctions proponents such as Ros-Lehtinen - that opposition protesters are responsible for some of the killings and other human rights abuses over the past few months, and that the Venezuelan government has taken steps to hold perpetrators accountable, with at least 19 arrests of "state agents." The letter states:

at least 42 people have died, including opposition activists, government supporters, bystanders and security agents.   Government security forces have been implicated in killings and accused of human rights abuses, and at least 19 state agents have been jailed in relation to these alleged abuses.  A number of fatalities and injuries have reportedly been caused by protesters themselves.  Security forces and civilians have been shot and killed while trying to remove barricades erected by protesters and motorcyclists have been beheaded by wire stretched across the road by protesters.

It also notes that the U.S. would be isolated regionally in sanctioning Venezuelan officials, as

While the United States government does not have to agree with its neighbors in the Western Hemisphere, it should take their opinions into account, as it takes European or African governments’ opinions into account in those regions.  The Union of South American Nations (UNASUR), the Caribbean Community (CARICOM), and the Organization of American States (by a 29-3 vote) have all issued statements that are in various ways supportive of the Venezuelan government and that call for the respect of the country’s democratic institutions.  A number of presidents and governments, including Michelle Bachelet of Chile, have publicly warned against attempts to forcibly remove the democratically elected government of Venezuela. As State Department spokesperson Jen Psaki noted on Wednesday, there are “no indications that other Latin American countries at this time would support sanctions on Venezuela.”

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Remember When Venezuela and Bolivia Kicked the U.S. DEA Out of Their Countries, Accusing It of Espionage? Looks Like They Were Right... Print
Written by Stephan Lefebvre   
Thursday, 22 May 2014 10:48

En español | Em português

 

In their latest article on U.S. government spying for The Intercept, Ryan Devereaux, Glenn Greenwald and Laura Poitras review and publish leaked documents that show that the U.S. government may have used the Drug Enforcement Administration (DEA) to aid the National Security Agency (NSA) to spy on U.S. citizens and non-citizens in foreign countries. The NSA is shown to have assisted the DEA with efforts to capture narcotraffickers, but the leaked documents also refer to “a vibrant two-way information sharing relationship” between the two intelligence agencies, implying that the DEA shares its information with the NSA to aid with non-drug-related spying. This may explain how the NSA has gathered not just metadata but also the full-take audio from “virtually every cell phone conversation on the island nation of the Bahamas.”

The authors write,

The DEA has long been in a unique position to help the NSA gain backdoor access to foreign phone networks. “DEA has close relationships with foreign government counterparts and vetted foreign partners,” the manager of the NSA’s drug-war efforts reported in a 2004 memo. Indeed, with more than 80 international offices, the DEA is one of the most widely deployed U.S. agencies around the globe.

But what many foreign governments fail to realize is that U.S. drug agents don’t confine themselves to simply fighting narcotics traffickers. “DEA is actually one of the biggest spy operations there is,” says Finn Selander, a former DEA special agent who works with the drug-reform advocacy group Law Enforcement Against Prohibition. “Our mandate is not just drugs. We collect intelligence.”

What’s more, Selander adds, the NSA has aided the DEA for years on surveillance operations. “On our reports, there’s drug information and then there’s non-drug information,” he says. “So countries let us in because they don’t view us, really, as a spy organization.”

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Hank Johnson on the Two-Year Anniversary of the Ahuas Killings and the Launching of a Joint Inspector General Review of the Incident Print
Written by Alexander Main   
Monday, 12 May 2014 15:37

Sunday, May 11 marked the grim two-year anniversary of a tragic incident that CEPR has investigated and frequently blogged about: the DEA-related killing of four indigenous villagers in the northeastern Moskitia region of Honduras.  The victims – two women, a fourteen year-old boy, and a young man – were in a small passenger boat headed to the town of Ahuas when they were shot dead by a counternarcotics team made up of DEA and Honduran agents.  Four other boat passengers were injured.  When Honduran police authorities described the drug interdiction operation as “successful,” local authorities and human rights groups protested, pointing out that those killed all had legitimate reasons for traveling on the river and that there was no evidence that police agents had fired in “self-defense” as the DEA alleged.  

Congressman Hank Johnson (D-GA), who initiated a congressional letter demanding a full U.S. government investigation of the incident back in January of 2013, has authored an opinion piece for Al Jazeera America that was published on the two-year anniversary date.  The piece laments the DEA’s response – or lack of response – to the congressional letter, which was signed by 58 members of the House of Representatives:

Sadly, the response we received from the DEA failed to address key questions about the U.S. agents’ role in the incident and showed no indication that measures would be taken to avoid future accidents of this kind. Though the official reply to the letter made no reference to our request for an investigation, an anonymous DEA official told the press that there would be “no separate investigation.”

Most appalling, though, was the news months later that the DEA had ignored Honduran investigators’ requests to interview the U.S. agents involved in the operation and perform forensic tests on their weapons. Given that Honduran police told the investigating team from the Public Ministry that the DEA had led the mission and ordered a helicopter gunman to fire on the passenger boat, this lack of cooperation could only heighten suspicions of DEA responsibility for the deaths.  

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Dinant: We Don’t Forcibly Evict; Government Security Forces Do That Print
Written by Dan Beeton   
Thursday, 08 May 2014 13:16

As we’ve described before, there is much controversy surrounding the World Bank’s International Finance Corporation’s investment in palm oil production in the Bajo Aguan, Honduras. Wealthy landowners have been engaged in a violent conflict with campesinos, resulting in the deaths and forced evictions of many campesinos at the hands of security forces both governmental and private. The company at the heart of the investigations and recent media scrutiny is Dinant, owned by the man many consider to be Honduras’ wealthiest and most powerful, Miguel Facussé.

As we have previously noted, Facussé has admitted the killings of some campesinos by his security forces. A 2011 human rights report from the Food First Information and Action Network, the International Federation for Human Rights and other groups details a number of killings, kidnappings, torture, forced evictions, assaults, death threats and other human rights violations that victims, witnesses and others attribute to Facussé’s guards.

Facussé has attempted to clean up his public image before, such as a notable December 2012 interview with the Los Angeles Times in which he made the case that just because he keeps a gun on his desk, and just because he “keeps files of photos of the various Honduran activists who are most vocal against him,” and just because one of his private planes was used to fly the foreign minister out of the country (against her will) during the 2009 coup, and just because he was aware of the coup plans before the coup, he’s really not a “bad guy.” And sure, he admitted he “probably had reasons to kill" attorney Antonio Trejo Cabrera, who worked on behalf of campesino groups in the Aguan, but Facussé said, "I'm not a killer."

Now Dinant has demonstrated a similar PR savviness. Writing in the Guardian after a series of articles examining the IFC/Dinant controversy, Dinant corporate relations director Roger Pineda Pinel noted among other things that “We have never engaged in forced evictions of farmers from our land; such evictions are undertaken exclusively by government security forces acting within the law and under instruction from the courts.”

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The Colombian President, “Some Judge” and the Mayor of Bogotá Print
Written by Jake Johnston   
Monday, 28 April 2014 13:04

Last week the Wall Street Journal interviewed Colombia's president Juan Manual Santos and described his thoughts on the controversial ouster of Bogotá mayor Gustavo Petro:

Mr. Santos said he didn't want to oust Mr. Petro, but he had to follow the law, even though it hurt him politically. He said he was ready to reinstate Mr. Petro if some judge ordered him to do so.

Well, lucky for Santos, he got his wish. The New York Times reported on April 23:

But a judge in Bogotá on Tuesday found that Mr. Santos had acted improperly when he ignored a request by the Inter-American Commission on Human Rights to suspend the ouster because it could violate the mayor’s rights.

“Some might like it and others not, but my obligation as president of the country is to obey the law and the rulings of judges,” Mr. Santos said, adding that he had no choice but to reinstate Mr. Petro.

All’s well that ends well? Perhaps not. On April 25, the Associated Press reported:

Colombian President Juan Manuel Santos says he'll appeal a court ruling that forced him to reinstate the capital's mayor a month after the official was removed for administrative irregularities.

And why would he do such a thing, if he was indeed “ready to reinstate Mr. Petro if some judge ordered him to do so”, as “some judge” had in fact done? The AP explains:

Santos said Friday said that he will appeal the decision because it has put the government's credibility at risk.

 
Piketty in Washington: How to Reverse the Increasing Concentration of Wealth Print
Written by Mark Weisbrot   
Tuesday, 15 April 2014 16:21

French Economist Thomas Piketty, author of the best-selling “Capital in the Twenty-First Century,” came to Washington DC today for a series of discussions with other economists and the public. The book itself, whose author has made enormous contributions over the past 15 years analyzing the distribution of income and wealth, is very rich in historical and data-driven economic analysis and has been widely reviewed. It could very well become one of the most influential books on economics in decades. This is not a review but rather a brief commentary on some of the extraordinarily interesting discussion – not often seen in “This Town” – that Piketty’s visit inspired.

One of Piketty’s main concerns is the increasing concentration of wealth that has characterized the past few decades, in the United States and other developed economies. He describes this phenomenon in great detail but also abstractly and usefully as r > g; in other words, the more that the rate of return on capital exceeds the rate of growth of the economy, the more wealth is concentrated at the top. Piketty noted a number of times, in response to questions, that he sees – as do many Americans – the main problem with inequality reaching what he called “extreme” levels is that it makes it “impossible to have proper functioning of democratic institutions.” His principal proposal for reversing this trend is a progressive tax on wealth.

At the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution, my colleague Dean Baker strongly agreed with Piketty’s proposal to tax wealth, but argued for a “Plan B,” among other reasons because Plan A may prove to be politically difficult or impossible for some time to come. Baker’s proposals were interesting in that they were designed to lower “r” while at the same time raising “g.” He went through several sectors of the economy where there are large “economic rents” that can be captured through taxation or other reforms, while at the same time increasing the overall efficiency of the economy and therefore the growth of output. The financial sector is obviously target number one, where even a small financial transactions tax could capture tens of billions of dollars of annual revenue while reducing wasteful and even harmful trading (Baker referred to Michael Lewis’ “Flash Boys” as a prime example). Then there are patents, where we in the U.S. pay $380 billion per year for drugs whose price is composed of something like 80 or 90 percent monopoly rents – about 2 percent of GDP lifted from the non-super-rich; plus the impediments to the advancement of medical science and actual harm to human health, as pharmaceutical companies hide their data, lie about their results, and promote the use of patented drugs for inappropriate purposes. (As one critic of the pharmaceutical industry put it, there are a lot more healthy people than sick people out there, so if you are a pharmaceutical company with a patented drug, you want to get some of those healthy people into your market).

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Human Rights Watch Should Stick to the Facts on Venezuela Print
Written by Mark Weisbrot   
Thursday, 10 April 2014 12:55

en español

Despite the fact that the New York Times had to run a correction on February 26 for claiming that Globovisión in Venezuela was “[t]he only television station that regularly broadcast voices critical of the government,” Daniel Wilkinson of Human Rights Watch (HRW) repeats the same error in the New York Review of Books yesterday, writing that:

Two of the four private stations voluntarily dropped their critical coverage; a third was forced off the air; and the fourth was hounded by administrative sanctions and criminal charges until the owner sold it last year to investors reportedly linked to the governments, who have dramatically curtailed its critical content.

In fact, the stations he claims have “dropped their critical coverage,” Venevisión and Televen, regularly run coverage that is critical of the government, as documented here.

Since the claim that these stations have “dropped their critical coverage” is demonstrably false, the NYRB, like the New York Times, should run a correction.

The fourth station he refers to is Globovisión. During the run-up to last April’s presidential elections, according to a Carter Center study, Globovisión gave nine times as much coverage to opposition presidential candidate Henrique Capriles as to governing party candidate Nicolás Maduro. Readers who are familiar with right-wing TV in the United States will note that this would not be possible for Fox News, for example, to get away with. So, if Globovisión “dramatically curtailed” its anti-government bias – Wilkinson offers no data -- because it was bought by someone who wanted to practice mainstream journalism, the station could still have a lot of room to trash the government.

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FiveThirtyEight Gets it Wrong on Venezuela Print
Written by Mark Weisbrot   
Friday, 04 April 2014 17:11

Nate Silver, who became famous for his use of polling data to accurately project U.S. elections, launched a new blog – FiveThirtyEight.com last month.  It’s been off to a rough start, “something between a disappointment and a disaster” as Paul Krugman wrote soon after its launch, because of some pieces that handled data rather badly. “[S]loppy and casual opining with a bit of data used, as the old saying goes, the way a drunkard uses a lamppost — for support, not illumination,” says Krugman.

I leave it to the reader to decide whether the FiveThirtyEight article on March 17 by Dorothy Kronick on Venezuela fits this description.  While it has become acceptable to publish almost anything about Venezuela, so long as it makes the government look bad, here at CEPR we apply the same standards to all products.

The thesis of the article is strange.  Correctly noting that the political polarization in Venezuela is overwhelmingly along class lines, with the upper income groups tending to support the protests and lower-income Venezuelans supporting the government, she asks  rhetorically “why the divide?” and answers: 

They disagree over a political vision for their country in part because they measure Chavismo against two different benchmarks: Chavistas compare the present to Venezuela’s pre-Chávez past, while the opposition contrasts the current economic situation with more recent developments in the rest of Latin America.

I think what she means to say is that Chavismo looks better as compared with Venezuela’s pre-Chávez era, than it does compared with the rest of Latin America. The first part is a no-brainer: per capita GDP actually fell by more than 15 percent in the 20 years prior to Chávez (1978-1998).   However there is no evidence that the two sides are making any such different comparisons.  Do voters anywhere in the world judge their government based on a comparison to its peers?  If that were the case in the U.S., for example, President Obama’s approval ratings would be very high and the Democrats would be sailing to a landslide victory in November’s congressional elections because the relevant income-level comparison for the U.S. is Europe, which has done vastly worse in the recovery from the Great Recession since 2009.     

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USAID Subversion in Latin America Not Limited to Cuba Print
Written by Dan Beeton   
Friday, 04 April 2014 15:26

En español

A new investigation by the Associated Press into a U.S. Agency for International Development (USAID) project to create a Twitter-style social media network in Cuba has received a lot of attention this week, with the news trending on the actual Twitter for much of the day yesterday when the story broke, and eliciting comment from various members of Congress and other policy makers. The “ZunZuneo” project, which AP reports was “aimed at undermining Cuba's communist government,” was overseen by USAID’s Office of Transition Initiatives (OTI). AP describes OTI as “a division that was created after the fall of the Soviet Union to promote U.S. interests in quickly changing political environments — without the usual red tape.” Its efforts to undermine the Cuban government are not unusual, however, considering the organization’s track record in other countries in the region.

As CEPR Co-Director Mark Weisbrot described in an interview with radio station KPFA’s “Letters and Politics” yesterday, USAID and OTI in particular have engaged in various efforts to undermine the democratically-elected governments of Venezuela, Bolivia, and Haiti, among others, and such “open societies” could be more likely to be impacted by such activities than Cuba. Declassified U.S. government documents show that USAID’s OTI in Venezuela played a central role in funding and working with groups and individuals following the short-lived 2002 coup d’etat against Hugo Chávez. A key contractor for USAID/OTI in that effort has been Development Alternatives, Inc. (DAI).

More recent State Department cables made public by Wikileaks reveal that USAID/OTI subversion in Venezuela extended into the Obama administration era (until 2010, when funding for OTI in Venezuela appears to have ended), and DAI continued to play an important role. A State Department cable from November 2006 explains the U.S. embassy’s strategy in Venezuela and how USAID/OTI “activities support [the] strategy”:

(S) In August of 2004, Ambassador outlined the country team's 5 point strategy to guide embassy activities in Venezuela for the period 2004 ) 2006 (specifically, from the referendum to the 2006 presidential elections). The strategy's focus is: 1) Strengthening Democratic Institutions, 2) Penetrating Chavez' Political Base, 3) Dividing Chavismo, 4) Protecting Vital US business, and 5) Isolating Chavez internationally.

Among the ways in which USAID/OTI have supported the strategy is through the funding and training of protest groups. This August 2009 cable cites the head of USAID/OTI contractor DAI’s Venezuela office Eduardo Fernandez as saying, during 2009 protests, that all the protest organizers are DAI grantees:

¶5. (S) Fernandez told DCM Caulfield that he believed the [the Scientific, Penal and Criminal Investigations Corps'] dual objective is to obtain information regarding DAI's grantees and to cut off their funding. Fernandez said that "the streets are hot," referring to growing protests against Chavez's efforts to consolidate power, and "all these people (organizing the protests) are our grantees." Fernandez has been leading non-partisan training and grant programs since 2004 for DAI in Venezuela."

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The Americas Blog seeks to present a more accurate perspective on economic and political developments in the Western Hemisphere than is often presented in the United States. It will provide information that is often ignored, buried, and sometimes misreported in the major U.S. media.

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